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Civil Summons For Credit Card Debt? Don’t Make These Mistakes!

admin — Tue, 13 Jul 2010 00:30:23 +0000

Observations on the Most Common MISTAKES Consumers Make When Faced with a Credit Card Debt Lawsuit

1. Consumers ignore notices for Court.

Never, ever ignore a notice from the court. If you suspect it’s a fake (some FDCPA Violators a.k.a. “junk debt buyers” have been caught sending out fake documents that resemble a summons) please call your local courthouse and ask them for verification. A court clerk generally answers the phone and can search by case number or by your name.

The creditor is counting on you either not receiving the notice or not responding to it thus granting them a a default judgment. A default judgment means they WIN and can now garnish your wages and freeze your assets. You may not even receive of the judgment until a wage garnishment attachment is in place.

2. Consumers fail to respond to summons.

Many consumers feel guilty about their debt(s) and fail to respond to the summons within the time-frame indicated. Even if your debt is valid, within SOL and you want to settle, YOU STILL NEED TO RESPOND TO THE SUMMONS WITH AN ANSWER within the time-frame granted (from the date of service) which is usually 20 to 30 days.

I’ve seen too many cases where the consumer works out a deal directly with the debt collector (Plaintiff) and never responds to the court placing that responsibility on the Plaintiff. Guess what? Plaintiff never withdraws their suit and now they have a default judgment in addition to whatever monies they’ve already collected from the debtor.

3. The following practice by debt collectors seem to be an increasingly common (and sleazy) occurrence. The debt collector may sue a consumer is Court. Instead of using the Sheriff to serve the summons, the collector likely will opt to use a special process server. (This is what happened to me!)

The consumer never receives the summons because of improper service (summons was left in an obscure location on the property, with a neighbor, etc.) thus the consumer never answers the complaint, and the debt collectors win a default judgment. BUT, the debt collector sits on the judgment and waits two to three years before executing on it…usually by a surprise wage attachment. The first the consumer ever knows of the suit or judgment is when their wages are garnished. The consumer will have a hard time trying to get the Court to vacate the judgment after two or three years. And the wage garnishment will stand.

This is another excellent reason to sign up for credit monitoring so you will know immediately if something like this has happened. Additionally, many district courts have websites where you can search for your name, not a bad idea to do on a monthly basis if you suspect a collector will be filing a suit against you.

4. When served with a summons (if you are even served), immediately contact an attorney. If you can’t afford an attorney, you can file Pro Se, which means you represent yourself. But by all means, file the answer within the 20 to 30 days indicated! You may qualify for legal aid AND there are resources out there to help you draft your documents, check my links for referrals.

I recommend sending a Notice Of Appearance (this instructs the Court that you are an active participant in the lawsuit and that you should be informed of all communication at a designated address.)

You need to file the Answer to Complaint, Affirmative Defenses document which answers their numbered allegations with an Affirm, Deny, or Lack the Knowledge to Answer type of statment. On the same document you then go on to assert common defenses to credit card debt lawsuits such as out-of-statute, statute of frauds, etc.

You also need to send a Certificate of Service that proves you mailed your Answer documents to the Plaintiff as well as filed them with the court. AND, I highly recommend you send a Cease & Desist Letter to the Plaintiff (read my post about How To Intimidate Debt Collectors for a great tip to use w/ this letter!) that instructs them to only contact you via written correspondence and bars them from contacting your employer, friends, relatives and neighbors.

You should also consider initiating “Discovery” by serving them with a Request for Production of Documents. Basically, you want to put them on notice that you are aware of your rights, are not going to roll over and accept a default and MAKE THEM PROVE THEIR CASE!

It’s well known that third-party debt collectors often only have an affidavit of debt to go off of. If you don’t request any documentation that is enough for them to win or obtain a judgment. However, if you request documentation they must furnish it at a hearing. If they can’t, you win!

For more information about how to fight a credit card debt lawsuit or to purchase my Word & PDF Fill-in-the-Blank templates for Notice of Appearance, Answer, Discovery, and more please visit ihavebeenserved.info.

You have nothing to lose by fighting these predatory debt collectors and everything to gain!

By: Jay M Johnson

How to Beat the Bill Collector With Sample Cease and Desist Letter

admin — Tue, 27 Apr 2010 10:10:57 +0000

Debt collectors are highly motivated to convince debtors to pay the debt because they frequently work on a low base pay plus commission. This business model has created the reputation for bill collection agencies that we know today.

The collector might engage in threatening behavior and harassment. However, like any other business they are governed by laws that prohibit certain abusive practices.

There are three reasons for a debt collector to contact you: your creditor has not received a payment from you within the time frame discussed in the contract; you are a victim of an identity theft meaning someone used your identity to obtain credit and didn’t pay it off; and finally, you might be contacted by collectors who are looking for someone other than you.

When contacted by a collector, take as much information as possible from the caller. Ask for the name of the company, address, the caller name, fax and phone number, amount owned, and the name of the creditor who passed your account to them. Also, tell them you expect to receive a notice in the mail concerning this debt. The last step is very important because you need to have proof of the debt in question in writing.

If you discovered that the debt is not yours, never pay it off simply to get rid of the collector. Also, never ignore the collector either. They will not stop contacting you, and may even file a lawsuit against you. If you are repeatedly being contacted by a collector looking for someone other than you, it may be considered a form of harassment. To stop this you need to send them a letter requesting to cease calls.

If you established that the debt is yours and you don’t feel comfortable dealing with a collector via phone, tell them you want all future correspondence in writing. You need to send this request via a certified mail and request a return receipt. If you want to allow calls only between 5pm and 6pm, tell them about it in the letter. By law collection companies are required to respect your privacy and will have to cease all phone calls to your home, relatives, neighbors, and work.

Once you have their claims in writing it’s easier to seek legal help, and keep records of your correspondence. Send all your responses to bill collectors via Certified Mail. This way you will have proof of receipt by the addressee.

Remember that the amount they claim you owe is negotiable. You can negotiate the total amount due, number of payments, and the payment deadline. Once you worked out the payment plan, request it in writing.

What a debt collector CANNOT do:

1.) Use deceptive practices. For example, threaten you with arrest or trick you into paying for collection calls.
2.) Use obscene language.
3.) Call you at work after you tell them that your boss does not approve these calls.
4.) Deny you the right to receive a written notice (within five days after your first phone conversation) that would tell you how much you owe and the name of the creditor that says you owe the money. If you do not receive the notice within five days, call the collection agency and ask for its address and fax number. Then, send a letter to the collector noting its failure to send you the required notice. As a minimum, make a note in your file.
5.) Refuse to give its name and the name of the collection company when asked.
6.) Put a debt on your credit report if you file a dispute. It must validate the debt by obtaining a verification of the debt or a copy of a judgment from the creditor before continuing their collection efforts. The results of the investigation must be mailed to you.

SAMPLE CEASE AND DESIST LETTER

The cease and desist letter has legal stature based upon the Fair Debt Collections Practices Act at section 805. You can read it for yourself here. The Fair Debt Collection Practices Act applies to both the agency and to attorneys who collect two or more debts per year. This law does not apply to the original creditor. However many original creditors will honor your request to not be called.

Please note that when a consumer debt collector receives a cease and desist letter they may move the account to legal status. This means that if they intend to sue you, the cease and desist letter will prompt them to bring suit immediately. So if there is an alternative way to stop being bothered by their calls, like using an answering machine, I’d suggest that you try it first. If there is no alternative then send the cease and desist letter.

Send the letter via certified mail with a return receipt request. Keep a copy of the letter for your files. The letter may take a couple of weeks to work its way through the collection agency’s system before your number is taken out of their automated dialers. Even after they receive the letter they are allowed (under law) to contact you one time to notify you of their intent.

The below letter is easily personalized by utilizing a word document program. Although not the cease and desist letter currently utilized by Credit Restoration Consultants, it will serve to notify consumer debt collectors of your intent and purpose. Although protected by copyright, single user permission is granted to individuals in the self help credit restoration process.

My Address
My City State and Zip

December 30, 2001

Acme Collection Agency
12345 West Main Street
Any Town, AL 30311

Dear Sir/Madam:

This letter is forwarded to your collection agency reference account number 123456 and the dunning collection notices/calls recently received. Insofar as your agency is a debt collector pursuant to section 803 of the Fair Debt Collection Practices Act, you will be treated like one. Therefore, the Fair Debt Collection Practices Act – and all of its relevant provisions – will be invoked.

YOU ARE HEREBY NOTIFIED that this is a disputed debt pursuant to section 809 of the Fair Debt Collection Practices Act. The specific content of said dispute was recently stated – verbally – to an individual at your agency who refused to provide their name upon request thereof. Pursuant to the FDCPA, you are prohibited from dunning a debtor when a specific debt is disputed.

YOU ARE FURTHER NOTIFIED that this is a disputed debt pursuant to section 623 of the Fair Credit Reporting Act. It is my belief that your agency has illegally reported this disputed debt to Equifax, Experian, and Trans Union. If this is the case, I will most certainly litigate an action against your agency insofar as it has willfully reported a disputed debt. Pursuant to the FCRA, your agency must notify the consumer reporting agencies of any disputed delinquency immediately upon notification thereof. A further cause of action may exist for failure to perform this ministerial task.

YOU ARE FURTHER NOTIFIED that I desire no further communication with your agency under section 805 of the Fair Debt Collection Practices Act. Your agency is to CEASE and DESIST all further communication immediately. Should I receive another piece of dunning correspondence that does not comport with the provisions of the FDCPA, I will immediately initiate litigation against your agency.

Sincerely,

John Q. Public

THIS IS AN ATTEMPT TO MAKE A DEBT COLLECTOR OBEY THE LAW. ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE. THIS COMMUNICATION IS FROM AN ALLEGED DEBTOR REFERENCE A DISPUTED DEBT.

By: William E. Lewis, Jr.

Help, I Am Being Sued by a Bill Collector!

admin — Thu, 01 Apr 2010 20:17:20 +0000

If I had a dime for every time a bill collector from a collection agency threatened someone in debt with a lawsuit and actually followed through on it, I would probably be an extremely poor man. It’s rare for a collection agency to sue people but it is more common for the bill collector to threaten legal action.

However, you should be aware that when you borrow money as a loan or on a credit card you are in an agreement. Creditors use carefully worded contracts so they do not lose their money if you default in your payments. Understand that anytime you are in breach of a contractual arrangement, you are exposing yourself to a lawsuit.

It’s because of this fact that bill collectors use their seemingly endless supply of one liner’s that end with threats of “legal action”.

Below are some reasons why the threat is rarely followed by action:

Suing someone takes time, financial & human resources.

Despite that bill collector going on about being in debt and suing you for being a bad person, it’s rarely an emotional decision to sue and more of a business one. Throwing good money after bad in hopes a lawsuit will collect a debt is a colossal waste, if you know you can never do anything with a judgement once you get it.

Supporting documents are required for a lawsuit.

There are situations where actual proof that the debtor owes the debt is somehow unavailable. A judge needs to hang his hat on something when issuing a judgment to a creditor against a debtor, and they want to see proof the debt is owed.

The statute of limitations.

This is a law in place that defines the period within which legal action may be taken. This time frame varies depending on your laws so you would need to check with a licensed professional in your area.

It’s far more cost effective for a collection agency to threaten legal action rather then actually spend the human resources, time and money at actually doing it. That’s why practically everyone dealing with bill collectors is threatened with a lawsuit at some point in the collection cycle. Collection agencies are masters of empty threats.

Now, don’t rest too easy, there are situations where the threat of a lawsuit may be very real. You have to be alert to two points in the collection cycle. The original creditor and the debt buyers.

The collection cycle usually follows this order: Original Creditor –> Collection Agency –> Debt Buyers.

Some original creditors can be litigious. What that means is they are inclined to sue you if they know you have the means to pay the debt and/or you own a home with equity. They may decide to hire a law firm to sue you to secure the debt with a judgement rather then assigning the debt to a collection agency to harass you.

The collection agency is usually (but not always, some creditors skip this step) the second step. The agency is a paid a commission usually ranging from 10-25% of what is collected for the original creditor.

The debt buyers are often the last collection step. It’s usually some form of a collection agency that buys debt for a few pennies on the dollar. Because the debt buyer owns the debt, they can do what ever they want with it. I have seen some debt buyers just blindly sue people when there are no assets to satisfy a judgement. It’s a really bad business decision but it does happen sometimes. Others won’t even spend the time or money, it depends on company policy.

A debt assigned to a collection agency on the other hand is a different story. I would estimate that your chances of actually being sued by a collection agency that has been assigned a debt for collection, is about as good as being struck by a bolt of lightening on relatively clear day. However, it is also fair to say that if you are behind in your payments and owe debt then your chance of being threatened with a lawsuit by bill collectors is nearly as certain as death and taxes.

Debt is tough to deal with; there is no easy way out of it. Seek help if you need it, debt settlement is one of the best alternatives for people dealing with collection agencies because it is fast, effective and has little to no further impact on your credit rating.

By: Richard G Cooper